The ultimate goal of investment is to increase the value of the invested amount over a period. You may invest in various assets, commodities, policies, and other schemes, to achieve your financial goals easily.

If you are wondering where to invest money, you may explore the following seven investment options.

1. Gold investments

Through the years, gold has served as a hedge to inflation. It is one of the oldest and most attractive investment products. The value of gold is known to increase quickly and hence must be a part of your investment portfolio. There are numerous ways to invest in gold, namely the gold deposit scheme, gold mutual funds, gold Exchange Traded Fund, and gold bars, among others. Many are even beginning to see gold commodities as an investment class for allocation of funds.

2. Unit-Linked Investment Plans

Unit-Linked Investment Plans (ULIPs) are a great option to build wealth over time. Besides offering the benefit of life cover, they help garner higher returns. Due to the equity advantage, you may usurp the benefits if the market performs well. While part of the premium is used to provide life cover, the balanced is invested in various asset classes through different funds. Based on your risk appetite, you may invest in the asset class of your choice and earn good returns.

If you are wondering how ULIP policies work, you may understand the same with the help of an example. Assume you have invested in a ULIP policy for 20 years. You are currently paying an annual premium of INR 20,000, and have a cover of INR 2 lakh (10 times the annual premium). If the deduction of all fees and charges amount to INR 3,000, the balance amount of INR 17,000 is invested in an equity fund of your choice. If the Net Asset Value (NAV) of the fund is INR 10, then you will obtain 1700 units (INR 17,000/10) of that particular fund. After two years, if the NAV of the fund increases to INR 12, then your fund value will increase to INR 20,400 (12*1700), thus fetching you returns. Over an extended period of time, you may earn higher profits through the power of compounding.

3. Public Provident Fund

Public Provident Fund (PPF) is an ideal option if you are looking for a risk-free investment avenue that generates attractive returns. It is a government-backed small savings scheme. PPF was launched in 1968 to encourage individuals to save money, thereby helping to create a sizeable retirement corpus. You may invest as little as INR 500 in a financial year towards your PPF. A major advantage of this type of scheme is that the government offers a good interest rate, which is currently 7.6%, as applicable from 1^st July 2018. Besides, you may enjoy the tax benefit of up to INR 1.5 lakh under Section 80C of the Income Tax Act, on the invested amount. You may also note that the interest amount is totally exempt from tax under Section 10(11). PPF, therefore, is not only an excellent way to earn good returns, but also helps reduce your tax liability significantly.

4. National Savings Certificate

Another investment scheme floated by the Government of India is the National Savings Certificate (NSC). It is a safe investment option that offers regular fixed income and tax benefits. You may purchase NSC through any branch of the Indian postal service by simply submitting an identity proof, residential proof, and application form for the investment. The current interest rate is 7.6%, which is compounded yearly for a five-year NSC. Therefore, you may enjoy good returns through the benefit of compounding.

5. Fixed Deposits

A great return on investment option is Fixed Deposits (FDs). Here, you earn interest after a fixed sum of money has been invested for a fixed term. For example, assume you hold an FD for a period of one year at the rate of 8 percent per annum. If you have deposited INR 1 lakh for a period of 1 year, then you will receive INR 1,08,000 upon maturity. FDs are considered as one of the safest forms of investment, as the market performance has no impact on them. Besides, FDs offer guaranteed returns on your investment. The rate of return is higher than some other avenues, such as current account, Treasury Bills, government bonds, and savings account, among others.

6. Insurance policies

Insurance policies ensure financial stability against uncertainties. You may invest in term insurance and health insurance policies and enjoy coverage against uncertainties. Term policies – a form of life cover – provide coverage for a fixed term. In case of an unfortunate event of death, your family receives the sum assured amount, which helps in securing their needs. Health insurance, one of the best investment options in India, provides coverage against hospitalization related expenses. Both these type of insurance policies offer tax benefit too.

7. Mutual funds

Another great option to earn high returns is mutual fund schemes. Such a type of investment allows you to choose from a variety of funds such as money market schemes, fixed income schemes, equity, and hybrid funds, among others. Besides, it offers the benefit of diversification across various sectors. Since the performance of mutual funds depends on the market fluctuations, you may earn high returns if the market fares well. Therefore, you may achieve your financial goals by investing in mutual funds- either as a lump sum amount or through systematic investment plans.

Investment is indeed a personal choice and depends on various factors such as risk ability, financial goals, duration of investment, and capability amount, besides others. You may consider the aforementioned best investment options in India and make a well-informed investment decision. A wise choice would be to diversify your portfolio through different investment styles, thereby helping you achieve high returns while reducing risk at the same time.